Bill Ackman: Valeant could be the next Berkshire Hathaway

Leave it to hedge fund manager Bill Ackman to turn one of his biggest investor-activism setbacks into one of his most bullish bets.

Other than shorting Herbalife, the founder of Pershing Square Capital’s most high-profile play recently was his campaign last year to help drug maker Valeant [fortune-stock symbol=”VRX”] acquire Botox maker Allergan. That all fell apart when Allergan, after months of fending off Valeant’s unsolicited offer, was sold to Actavis late last year.

During the hostile-takeover showdown, Ackman’s fund, in merger arbitrage fashion, had gone very long Allergan—a move that panned out to be very profitable for Pershing as Allergan shares rose on the takeover bids, even though the deal with Valeant failed.

But as soon as the situation changed, Ackman saw an opportunity to also play the other side of the coin. “We spent a year working with Valeant trying to take over Allergan, and one of the…